Lots of stuff to talk about here! As a writer, I put copyright notice on everything I print out or post on-line. I don't make a point of saying "use it freely," or "don't touch it!" I just point out that I wrote it. Someone said early in this thread that you HAD to get permission to record someone else's song. Wrong. You need that ONLY for the first recording. After that, it's what is called a "compulsary license," so the owner HAS to allow the recording. Now, if the new performer modifies the work, rewrites part of it, now, THAT's not allowed without permission. So one of the murky areas is that of arrangements. What constitutes "modification?" Lots of work for the lawyers on that.
As for the PROs (Performing Rights Organizations), they do have a tough time, sometimes, telling heavy-handedness from thouroughness. It's part and parcel of the movement toward our litigious society, that rules have to be written (and enforced) in order to preserve the intellectual rights involved. No matter how well-meaning a rule you draft, someone's gonna get caught in the net of that rule, and not necessarily the someone you intended to catch. Live music is threatened by the "safety first" reaction ot ASCAP/BMI enforcement of rules, for eveyone from Carnegie Hall down to the Church Basement Coffee House, Inc. Non-"popular" musics, such as folk, get tripped up because of the participatory nature of the group involved and the open nature of the venues (they don't have "open mic nights" at the Met -- I hope!).
So those of us who create our own music have a problem with recompense from those who then use it. Folk music doesn't get "monitored" by the PROs (they use AM radio play, for example), but our writers get "protected" by the traveling enforcers who ask for payment from the venues (and the barber shops, etc.) without any connection to the (woefully inadequate) payment TO the artists & writers of this kind of music. And the rules, as usual lagging behind reality and intent, don't get changed until enough attention is focused on them. Unfortunately, the only focus of late has been the restaurant and bar lobby's drafting of the "Fairness in Broadcasting" bill (I think that's what it's called) to exempt them from paying for the music they rebroadcast to establish the embience (sp?) they charge the public for.
This post has gotten long, so I'll stop.